TurkStream Delay

With growing European demand, Gazprom plans two additional pipelines to send Russian gas to Europe -- Nord Stream 2 across the Baltic Sea, and TurkStream across the Black Sea.

While Nord Stream 2 project has been gaining speed, TurkStream has seen its envisaged capacity halved and is facing a construction delay, possibly to end-2017, Medvedev said, adding however, that a year's delay, will not be critical for the company's plans.

"We could have had the first line project implemented in December 2016, [but] this deadline is shifting. If it shifts by a year, it will be nothing terrible," Medvedev said, according to Prime.

The project is affected by Turkey's political situation with the temporary government in place and upcoming elections on November 1, he said.

First proposed last December, TurkStream was expected to deliver 63 Bcm of Russian gas via four parallel underwater pipes of 15.75 Bcm/year capacity, across the Black Sea, bypassing Ukraine, and making landfall in Turkey's European province of Thrace.

The new plan involves the construction of two lines with a combined capacity of 32 Bcm, Miller said Tuesday. The first line is to supply Turkey's demand, with the rest flowing onward to central European states.

Turkish officials said earlier this year they had reached agreement on development of the first line, but not the remaining three.

Turkey currently receives 14 Bcm/year of Russian gas through the Transbalkan pipeline via Ukraine which Russia plans to close once TurkStream is completed.

The TurkStream project has run into difficulties since Turkey's general election in June failed to produce a working government, making it impossible for the Turkish parliament to hold a vote on approving the inter-governmental agreement for the line, which in turn has led to conflicting reports on whether Turkey was still committed to the project.

Outgoing Turkish energy minister Taner Yildiz said ratification of the inter-governmental agreement for the TurkStream project would be delayed until a new government could be formed, blaming Gazprom for failing to deliver coordinates for the planned pipeline to his ministry in time for the agreement to be voted on in the Turkish parliament before the June general election.

Gazprom plans to offset the European supplies cut from the TurkStream project with the third and fourth underwater lines of the Nord Stream pipeline, expected by the end of 2019 and doubling the current pipeline's capacity to 110 Bcm/year.

Last month, Gazprom signed a shareholders' agreement with Europe's BASF, E.ON, Engie, OMV and Shell, to build the Nord Stream 2 pipeline system, moving forward on an expansion previously opposed by EU authorities.

(platts.com)